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Call to Action on Recognizing the True Value of Nature

Over 25 ministers and vice-ministers convene to build momentum on Natural Capital Accounting

WASHINGTON, April 18, 2013 – More and more countries are putting natural assets like clean water, forests and other ecosystems into the center of their economic decision-making,a High-level Ministerial Dialogue on Natural Capital Accounting, on the eve of the World Bank-IMF Spring Meetings, heard today.

Over 25 ministers and vice-ministers of finance, development and environment attended the Dialogue – which convened the `first-movers’ of Natural Capital Accounting (NCA). This is a group of more than 60 countries committed to supporting NCA to move beyond GDP as the main measure of an economy’s progress.

Chairing the High-Level Dialogue today, World Bank Vice President for Sustainable Development Rachel Kyte said natural capital accounting was no longer an academic concept, with proof being the number of countries now doing it.

"Countries recognize that they cannot make difficult choices on development or achieve green and inclusive growth without the data to show how economic growth depends on natural assets. Natural capital accounting provides the data needed at every Cabinet table to make these choices,’’ Kyte said. "Since Rio+20 last year, we have seen momentum building. Whether it is water, forests or minerals, countries are coming forward to say they want to use natural capital accounting to manage these resources better.”

Today’s event included ministers from Colombia, Costa Rica, Denmark, Finland, France, Gabon, Namibia, Kenya, Rwanda, and Seychelles among others. More and more countries are recognizing the importance of NCA for improved economic decision-making. For example:

Kenya developed forest accounts to understand the contribution that forests make to GDP resulting in increased budgetary allocations to improve forest management.

Botswana has compiled water accounts to help plan for the country’s economic diversification and growth.

Australia also compiles water accounts to help it manage this scarce resource more effectively.

There is growing demand from developed and developing countries to include NCA in their economic toolkits. For example, Gabon in central Africa is interested in compiling forest accounts, to help it capture the full set of values flowing from its vast forests.

"Gabon has taken several measures to protect the environment, and to measure the impact of these actions, we are putting in place the process that will enable us to develop national environmental accounts and a new indicator for sustainable development, which will combine human development and ecological footprint indicators,” said Mr. Luc Oyoubi, Gabon’s Minister of Economy, Employment and Sustainable Development.

“Also, Gabon is planning to implement an environmental tax system which offers incentives for businesses that support the Government's reforms and sanctions those that do not respect environmental regulations."

The participants acknowledged that NCA has to be part of the discussion on Sustainable Development Goals post-2015. Issues currently being discussed for SDGs cover the three pillars of sustainability—economic, social, and environmental—and include poverty eradication, food security, sustainable energy, water, and social protection. Achieving a number of the SDGs will depend on sound management of natural assets. Food security, for example, will involve maintaining productive soils and the forests that regulate water flow, as well as managing the allocation of water among competing users.

NCA can help with these challenges and support countries to make more informed decisions as they also grapple with climate change. France, for example, has integrated energy and atmospheric emission accounts into economic models used for policy planning.

Pascal Canfin, Minister for Development, Ministry of Foreign Affairs, France said: "France believes that the generalisation of natural capital based indicators will help to build more resilient policies, even in sectors not directly linked to the environment. Concrete applications for public policies but also for private sector are becoming strategic for innovation and competitiveness in a planet with finite resources.’’

Today’s Dialogue highlighted the need for mutual support to build at scale. Philippe Sas, Deputy Head, State Secretariat for Economic Affairs, Switzerland said: ``Being a small open economy with just few natural resources, Switzerland has to approach its objective of an environmental and sustainability program by taking into account all parts in global value chains. This requires us to cooperate and work with developing countries as well as with private entities.’’

The private sector is a key component of this work. IFC, a member of the World Bank Group, is launching a Natural Capital program to create new methodologies and tools in collaboration with private companies. These will allow the private sector to measure, manage, report, and potentially value natural capital.

"Sound natural capital management goes hand in hand with benefits for companies, communities, and the environment,” said Usha Rao-Monari, Director, Sustainable Business Advisory, IFC. “Companies that take natural capital into account can save on resource use, access markets and financing, and mitigate major environmental and social risks," she added.

The World Bank is supporting countries to mainstream natural capital into national accounts and development planning through a global partnership called WAVES (Wealth Accounting and the Valuation of Ecosystem Services).

The WAVES partnership includes the United Nations Environment Programme, the United Nations Development Program, and the United Nations Statistical Commission; Botswana, Colombia, Costa Rica, Madagascar, and the Philippines, which are implementing programs; as well as financial or technical support from Australia, Canada, Denmark, France, Germany, Japan, The Netherlands, Norway, Spain, the United Kingdom, and civil society organizations.

A global action plan on NCA that lays the framework for its wider uptake was discussed today. It includes intensive support from partners – technical and financial – and aims to build on the work already being done at the country level.

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